Tuesday, April 5, 2011

Does Groupon cheapen your product

A photo company offered a 74% discount. $305 certificate for $79

They sold all 95.

95 x $79= $7505

Half to Groupon and the photographer's take is $3752.50 less the credit card charges Groupon passes on to them. Lets assume 2-2.5%. $3658.68 left for the photographer.

Let's assume in a perfect world that each session is one hour. $3658.68 /95= $38.51 per hour session.

Hardly worth the effort. But the photographer is trying to stimulate business. Why else discount a $305 value for $79.

This type of deep discounting spells trouble.

So what is the true value of this offer? $305 or the $38.51 the photographer netted?

Is the photographer inflating costs?

You decide.

Tony Mariani

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